If you leave your job before retirement and you do not meet the 2 year vesting period you will have three options:
- you will normally be able to claim a refund of your contributions, less a deduction for tax and the cost, if any, of buying you back into the State Second Pension (S2P) in respect of your membership up to 5 April 2016 when the LGPS was contracted out of the State Second Pension (S2P). Interest is paid if the refund is not made within one year of leaving but no refund can be made if you re-join the scheme in England or Wales within a month and a day of leaving or re-join before the refund has been paid. Also, a refund will not be payable if, when you leave, you are paying into the LGPS in more than one job and you continue to be a member of the LGPS in the job that is continuing, or
- you may be able to transfer your benefits to a new pension arrangement (providing you have been a member of the LGPS for at least 3 months) - see the section on transferring out for more information about this option, or
- you can delay your decision until you either, re-join the LGPS, transfer your benefits to a new pension arrangement, or want to take a refund of contributions. Where you delay your decision, you will have a deferred refund pension account. Please note, you can only hold a deferred refund account for a maximum of 5 years or until age 75, whichever is earlier. If you have not transferred your benefits to a new pension arrangement or re-joined the LGPS by that time a refund of contributions will automatically be payable to you.
If you have not met the 2 year vesting period when you leave, but you joined the LGPS before 1 April 2014 and have 3 or more months' membership, you will be entitled to a deferred benefit instead of a refund (but you can opt within 6 months of leaving to receive a refund if you wish).
- you can choose to keep your benefits in the LGPS. These are known as deferred benefits and will increase every year in line with the cost of living, or
- you may be able to transfer your deferred benefits to another pension arrangement - see the section on transferring out for more information about this option.
To find out how your deferred benefits will be calculated refer to the section called how your pension is calculated.
The value of the pension in your deferred pension account is held in the LGPS for you until either you decide to transfer the value to another pension scheme, or the deferred benefits are due to be paid. Your personal deferred benefits package consists of an annual pension, payable throughout your retirement, with an option on retirement to exchange some pension for a one-off tax free lump sum. It also includes life cover and financial protection for your family.
For information about when you can draw your deferred pension benefit please refer to the section called when can you take your deferred pension?